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Lazarus Chakwera speaks on Pay As You Earn

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Vera Kamtukule

President Lazarus Chakwera has said he would engage the Ministry of Finance to work on concerns that some quarters of the country have raised over government’s recent revision of Pay As You Earn (Paye).

The revision of the Paye schedule drew dissenting views, with bodies such as the Malawi Congress of Trade Unions (MCTU) arguing that the development would eat into employees’ little disposable incomes.

Though the tax-free band was maintained at K100,000, the government revised upwards other tax brackets with those earning between K100,000 and K330,000 taxed at 25 percent, those earning between K330,000 and K3 million taxed 30 percent while those earning between K3 million and K6 million are being taxed 35 percent.

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Those earning above K6 million are being taxed 40 percent.

Speaking when Malawians commemorated Labour Day Sunday, Chakwera said, once Finance Minister Sosten Gwengwe jets in the country from the United States, where he went to attend the 2022 United Nations Economic and Social Council Forum for Financing Development, they would sit down and work on modalities.

“Even though the budget was already passed [by Parliament], we can find some modalities without disturbing the budget in a bid to assist Malawians,” he said.

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Chakwera also said, with the easing of pressures triggered by the Covid pandemic, he was hopeful that companies would return to normalcy, thereby employing more people and offering better perks.

Labour Minister Vera Kamtukule also said they had taken up the issue of Paye and would engage the Ministry of Finance and the government’s tax adviser, the Malawi Revenue Authority (MRA), and other stakeholders on the issue.

“I am happy to report that we will have a tripartite meeting in the next two weeks with the Employers Consultative Association of Malawi, Malawi Congress of Trade Unions and ourselves. And I want to believe that, before the tripartite meeting, we should have already met with Ministry of Finance and MRA [officials] to see how best we can handle the issue,” she said.

MCTU President Charles Kumchenga said the Paye structure would hurt the majority of employees who are in the middle-income bracket.

“Apart from Paye, the government should work on the cost of living, which is high in the country. We want the head of State to act on the issue,” he said.

World Labour Day falls on May 1 every year and this year’s event was commemorated under the theme ‘Workers’ Rights: A Prerequisite for Inclusive Development’. It started with a solidarity march from Katoto Ground to Mzuzu Upper Stadium.

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